(Download) "Accelerating Losses with an Assignment for the Benefit of Creditors" by Florida Bar Journal " Book PDF Kindle ePub Free
eBook details
- Title: Accelerating Losses with an Assignment for the Benefit of Creditors
- Author : Florida Bar Journal
- Release Date : January 01, 2008
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 71 KB
Description
When a flow-through entity for federal income tax purposes (such as a partnership or Subchapter S corporation) has losses, such losses are allocable to the entity's owners. If the owners have sufficient tax basis in their equity to utilize such losses and such losses are not otherwise limited by at-risk or passive activity loss rules, owners typically desire to accelerate the recognition of such losses because such losses may be able to reduce their income taxes for the year in which such losses, are recognized or may generate a tax refund by being carried back to the two prior tax years under [section] 172(b)(1)(A) of the Internal Revenue Code of 1986, as amended. (1) For developers and home builders, many of these losses are attributable to the economic downturn and financial troubles that commenced in 2006 and 2007. This article examines the impact of the differences in the timing of loss recognition events by a developer seeking to sell or otherwise transfer real estate assets, file bankruptcy or commence an assignment for the benefit of creditors (an ABC proceeding) or that is subject to a foreclosure action, and how an ABC proceeding may be modified to constitute an abandonment loss and accelerate the timing of the loss recognition event.